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PRODUCTION OFF SHARPLY AT AREA FACTORIES, SURVEY FINDS

The manufacturing economy in Western New York during January slowed to its lowest level since last spring as production fell sharply at the area's factories, a local purchasing managers group said Thursday.

A new survey by the National Association of Purchasing Management -- Buffalo found that the manufacturing sector continues to grow, but at the slowest pace in nine months as the region feels the impact of the slowdown that is taking hold at factories nationwide.

The group's local index of business conditions slipped for the second straight month to 51.4 last month from 54.5 in December in a sign that the region's manufacturers are growing more slowly.

An index reading above 50 indicates growth, while one below that is a sign of contraction.

Still, the index indicates that the slump in manufacturing is not as severe in the Buffalo area as it is in other parts of the country. The national purchasing manager's index fell to 41.2 in January, down from the 44.3 it reported in December. The January reading was significantly lower than the 43.5 reading analysts had anticipated and suggested that the overall economy failed to grow for the first time in nearly a decade.

The biggest reason for the decline locally was a sharp drop in production at the area's factories. The group's production index plunged to 41.7 last month from 52 in December as 38 percent of the firms surveyed reported a decline in output at their factories. But the flow of new orders was steady, with the group's new order index inching up to 52.1 from 52. "For some, incoming orders are steady and production levels will hold steady," said William Ellis, the chairman of the group's business survey committee.

The job outlook also remained neutral, with the group's employment index rising to 50 from 48 in December. "Western New York manufacturers have not added jobs, but they are holding employment at the same level as last month," Ellis said.

Commodity prices continued to rise, with the group's price index rising to a 4-year high of 72.9 from 66 in December.

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